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TOTAL QUALITY

MANAGEMENT
Presented by:
Enrico C. Mina

TQM Briefing by Enrico C. Mina

The World Is Changing


Liberalization of trade and globalization of
business
Tougher competition
More demanding customers
Faster rate of technological change
More turbulent environment
TQM Briefing by Enrico C. Mina

MATSUSHITA
Change of thought makes your behavior
change.
Change of behavior makes your habits change.
Change of habits makes your personality
change.
Change of personality makes your destiny
change.
TQM Briefing by Enrico C. Mina

PARADIGM CHANGES (1)


THE PRINCIPAL PURPOSE OF A
BUSINESS ENTERPRISE
OLD: To make a profit.
NEW: To satisfy customers and win their
loyalty and continued patronage, which
leads to sales, market share, growth, and
profits.
TQM Briefing by Enrico C. Mina

PARADIGM CHANGES (2)


DEFINITION OF QUALITY
OLD: The totality of the characteristics or
features of a product or service;
conformance to internal specifications
NEW: Conformance to customer
requirements; fitness for customers use.

TQM Briefing by Enrico C. Mina

Customer Superordinate Goals


GOALS
Explicit
Quality

EXPECTATION LEVELS
Implicit

Customer

Delight

Cost
Delivery
TQM Briefing by Enrico C. Mina

Customers Bill of Rights


A customer has the right to courteous treatment by
the sellers representatives at all times and under all
conditions.
A customer has the right to the representatives full
time and attention during each and every transaction.
A customer has the right to fast and accurate
information about the product or service or the status
of the order.
TQM Briefing by Enrico C. Mina

Customers Bill of Rights


A customer has a right to have his/her
expectations met with a product or service of
the quality represented before the purchase.
A customer has the right to complain when the
product or service does not meet those
expectations--and to a prompt remedy when
the product or service is indeed at fault.

TQM Briefing by Enrico C. Mina

Customers Bill of Rights


A customer has the right to expect
knowledgeability, resourcefulness, problemsolving ability, concern--and results--from
those assigned to his/her account.
A customer has the right to expect
responsiveness and follow-through in
emergencies and special situations.
TQM Briefing by Enrico C. Mina

Customers Bill of Rights


A customer has the right to the benefits of
teamwork in the company he/she deals
with--without buckpassing, fingerpointing,
or runarounds.
A customer has the right to care, accuracy,
and attention to detail in filling his/her
orders for services and/or products.
TQM Briefing by Enrico C. Mina

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Customers Bill of Rights


A customer has the right to appreciation on
the part of those with whom he/she does
business -- appreciation both for the business
already given and for the business to be given
in the future so long as this Customers Bill
of Rights continues to be observed.
(From The Customer Communicator, published by Marketing
Publications, Inc., Washington, D.C.)
TQM Briefing by Enrico C. Mina

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PARADIGM CHANGES (3)


DEFINITION OF CUSTOMER
OLD: The ultimate buyer or user of the
product or service.
NEW: The next person, process, or system;
anyone on whom the product or service has
an impact.

TQM Briefing by Enrico C. Mina

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Chain of Customer-Supplier
Relationships
External
Suppliers

The
Company
2
3

End-users or
consumers

Intermediaries
or distributors

TQM Briefing by Enrico C. Mina

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PARADIGM CHANGES (4)


HOW QUALITY IS TO BE ACHIEVED
OLD: Produce large quantities, then have
quality control inspectors separate the
defectives from the good units; rework the
defectives if possible.
NEW: Emphasize prevention of defects by
improving the product/service and the
process that produces and delivers it.
TQM Briefing by Enrico C. Mina

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Process
DEFINITION: a series of activities that transform
inputs into desirable outputs
ELEMENTS:

Man (people)
Machines
Materials
Methods
Measurement
Environment
TQM Briefing by Enrico C. Mina

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PARADIGM CHANGES (5)


RELATIONSHIP BETWEEN QUALITY
AND PRODUCTIVITY
OLD: Quality and productivity are mutually
exclusive. High quality and low costs cannot
go together.
NEW: Quality is the road to productivity. A
high-quality process leads to reduced waste,
lower costs, and bigger volumes.
TQM Briefing by Enrico C. Mina

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Cost of Quality (1)


Cost of Quality is defined as the cost of
keeping customers satisfied. It includes all
costs incurred to ensure that customer
requirements are ultimately met.
Components:
Cost of prevention - costs incurred to prevent
failures in each process element
TQM Briefing by Enrico C. Mina

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Cost of Quality (2)


Cost of appraisal - costs of inspection, testing,
measurement, and information-gathering to
determine the state of the process
Cost of non-conformance - the costs of failure or
poor quality. Two types:
Internal failure costs - incurred when failures are
detected in-house, before sending output to the
customer
External failure costs - incurred when failures are
detected by the external customer.
TQM Briefing by Enrico C. Mina

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Cost of Quality (3)


Quality experts estimate that costs of nonconformance are equal to 25% - 35% of
gross sales or revenue.
Not all CONCs are visible because
conventional accounting systems do not
distinguish between productive vs. nonproductive uses of resources.
TQM Briefing by Enrico C. Mina

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The Cost of Non-conformance


Iceberg
visible costs

hidden
costs
TQM Briefing by Enrico C. Mina

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Cost of Quality (4)


What should happen:
External failure cost
C
o
s
t
s

Internal failure cost


Appraisal cost
Prevention cost

Savings
Total costs
with improved
process quality

Time
TQM Briefing by Enrico C. Mina

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PARADIGM CHANGES (6)


MEASUREMENT OF QUALITY
OLD: Acceptable quality levels (AQL) are
good enough.
NEW: Maximum defect incidence must be
measured in terms of parts per million
(ppm).

TQM Briefing by Enrico C. Mina

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99.9% Reliability
If the human heart were 99.9% reliable, it
would miss 36,817 beats a year (@ 70 /
minute), equivalent to 8.8 hours without a
heartbeat.

TQM Briefing by Enrico C. Mina

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6-sigma Reliability
99.99966% reliability or 3.4 failures per
million
Equivalent to missing only one free throw
out of 300,000 attempts.

TQM Briefing by Enrico C. Mina

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Overall Process/System
Reliability

0.95

Number of steps or
elements
20
1
0
0.36
0.60

0.77

0.98

0.67

0.82

0.90

0.99

0.82

0.90

0.95

0.999

0.98

0.99

0.99
5

TQM Briefing by Enrico C. Mina

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PARADIGM CHANGES (7)


THE CAUSES OF QUALITY PROBLEMS
OLD: It is the fault of the workers. They are
not careful enough.
NEW: The deficiency lies in the system or
process, over which management has
control and is therefore responsible.

TQM Briefing by Enrico C. Mina

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Common and Special Causes (1)


According to W. Edwards Deming, the
causes of quality problems fall under two
categories:
Common causes, those which are related to the
system of operation, and
Special causes, those that are identifiable with
specific events and people.

TQM Briefing by Enrico C. Mina

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Common and Special Causes (2)


Proportion of the incidence of problems due
to these two categories are:
Common causes
94%
Special causes
__6%
100%

TQM Briefing by Enrico C. Mina

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Process Muda (1)


Muda is the Japanese word for waste.
The presence of muda in a process, through one or
more of its elements, deteriorates quality,
increases costs, and delays delivery by
lengthening the cycle time.
Muda is non-value-adding and therefore
unproductive.

TQM Briefing by Enrico C. Mina

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Process Muda (2)


Overproduction - Each work station or process
stage tries to operate at full capacity, leading to a
build-up of WIP or FGI. These hide problems by
making them tolerable, although at high cost, and
prevent them from being addressed. This is the
mother of all muda.

TQM Briefing by Enrico C. Mina

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Process Muda (3)


Inventory - Excessive supplies and parts are costly
to carry: cost of tied-up capital, storage, security
and pilferage, supervision, insurance,
obsolescence and deterioration.
Waiting - Waste of time when people and work
stations are capable of work but are idle.

TQM Briefing by Enrico C. Mina

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Process Muda (4)


Transportation - Additional cost and time created
by transferring the location of people, materials, or
products without any value being added.
Motion - Created by people being made to exert
physical efforts that merely add to fatigue and
time but do not create value.

TQM Briefing by Enrico C. Mina

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Process Muda (5)


Overprocessing - Created when the process
is performing work that is unnecessary from
the customers point of view.
Producing failures - Process failures like
defects and errors result in customer
dissatisfaction, higher costs, and delays.

TQM Briefing by Enrico C. Mina

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Process Muda (6)


In most organizations, mudas are considered
normal and have been tolerated over a long
period of time. Many are even in budgets.
Every muda removed and prevented from
recurring improves process quality and
reduces cost and cycle time, thereby
automatically increasing productivity.
TQM Briefing by Enrico C. Mina

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Effect of Mudas

Mudas are non-value-adding.


They lengthen process cycle times.
They increase costs.
They cause quality to deteriorate.
The value-adding moment is very short.
Eliminating mudas will cause QCD to
improve, often with very little investment.
TQM Briefing by Enrico C. Mina

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Process Flowcharting (1)


The first step in identifying muda is to draw a
flowchart of the process.
A flowchart is a graphical representation of a
process. It is essential to process analysis and
improvement.

TQM Briefing by Enrico C. Mina

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Process Flowcharting (2)


The flowchart, to be useful, must be the as is
flow (based on the actual sequence of activities),
not necessarily the theoretical one in the manuals.
The best sources of information are the people
who are actually working on the process.

TQM Briefing by Enrico C. Mina

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Basic Symbols (1)


Beginning and end
Operation
Sub-process
Wait/delay
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Basic Symbols (2)


Transportation
Storage
Connector

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Basic Symbols (3)


Direction of
process flow
Document
?

Decision
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Customer

Dept. X

Dept. Y

Dept. Z

START

Total Cycle
Time:

Min.: ___hrs
Max.: ___hrs
N

A
Y

B
Y

Ave.: ___hrs

Y
Total Distance
Traveled:
Min.: ___m
Max.: ___m

Ave.: ___m

Y
END

D C. Mina
TQM Briefing by Enrico

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Identifying Muda (1)


Ask the following questions:
What are we doing? Can we avoid doing it at
all?
Who is doing it? Can it be done better by
someone else (e.g., a subcontractor)?
Where are we doing it? Can it be done better
somewhere else?

TQM Briefing by Enrico C. Mina

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Identifying Muda (2)


When and how often are we doing it? Can it be
done better at other times or with another
frequency?
How are we doing it? Can it be done better
through another way?
If it is done manually, can we automate it?
Can it be done simultaneously or in parallel?
Can we apply Information Technology and telecommunications effectively?
TQM Briefing by Enrico C. Mina

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Identifying Muda (3)


If there is no clear value-added, then that
particular activity is muda and should be
eliminated.
Draw a new, should be flowchart incorporating
all the muda-eliminating features.
Create, document, and continuously improve
standards for each process element. Use the
standards for training staff.
TQM Briefing by Enrico C. Mina

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Muda Elimination
The process should be revised to eliminate
identified muda. Every such muda eliminated and
prevented from recurring reduces costs and cycle
time and improves process quality.
The opportunities for improvement through the
continuous elimination of muda are infinite.

TQM Briefing by Enrico C. Mina

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PARADIGM CHANGES (8)


THE ROLE OF PEOPLE
OLD: People should work in strict conformance with the instructions given by their
superiors.
NEW: The people in the workplace have
detailed knowledge, experience, and ideas for
improvement. They should be encour-aged
to actively participate in improvement.
TQM Briefing by Enrico C. Mina

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PARADIGM CHANGES (9)


TIME FRAME
OLD: Achieve the bottomline targets set for
this month or quarter.
NEW: Allocate resources to ensure
continuing ability to offer superior value to
customers relative to competitors.

TQM Briefing by Enrico C. Mina

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PARADIGM CHANGES (10)


THE ROLE OF QUALITY
OLD: Quality is an internal problem to be
solved.
NEW: Quality is our strongest strategic
weapon against the competition.

TQM Briefing by Enrico C. Mina

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Profit Impact of Market Share


ACHIEVING COMPETITIVE SUCCESS
THROUGH QUALITY
Achieve superior relative perceived quality in
both products and services.
Achieve a high degree of conformance or
process quality.
(From The PIMS Principle by Robert Buzzell and
Bradley Gale)
TQM Briefing by Enrico C. Mina

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PARADIGM CHANGES (11)


PHILOSOPHY OF IMPROVEMENT
OLD: If it aint broken, dont fix it.
NEW: If it is not perfect, make it better.

TQM Briefing by Enrico C. Mina

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Continuous Improvement
(Kaizen)
KAIZEN is a system of small-step
improvements taking place continuously at
all levels and functions of the organization.
It promotes improvements through projects
that do not cost much money.

TQM Briefing by Enrico C. Mina

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Kaizen, Maintenance, &


Innovation
Top
Mgt.
Middle
Mgt.
Supervisors
R&F

Innovation
Kaizen

Maintenance

TQM Briefing by Enrico C. Mina

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The Gemba (Workplace)


Kaizen places heavy emphasis on seeking
improvements in the gemba, the work-place
where processes are in operation and where
value is created for customers.
The opportunities for improvement in the
gemba are infinite.

TQM Briefing by Enrico C. Mina

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Five Gemba Principles (1)


When an abnormality takes place, go to the
gemba first to get first-hand information.
Check with the gembutsu (the real things
inside the gemba: employees, materials,
equipment, records, actual rejects, working
conditions, etc.).
Take temporary countermeasures on the spot
to relieve the situation.
TQM Briefing by Enrico C. Mina

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Five Gemba Principles (2)


Trace the root causes of the abnormality and
take permanent countermeasures that will
prevent recurrence.
Standardize all improvements made.

TQM Briefing by Enrico C. Mina

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Superordinate Principles
Kaizen has to be absorbed into the
organizations culture.
Process and Results
Total Systems Focus
Non-blaming/Non-judgmental Behavior

TQM Briefing by Enrico C. Mina

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Process and Results


Process creates results. If results are not
satisfactory, the only permanent way to
improve them is to improve the process first.
Results are needed to verify if process
improvements are working.
Therefore, there must be a balanced
emphasis on both process and results.
TQM Briefing by Enrico C. Mina

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Total Systems Focus


A system is an integrated whole made up of
distinct but interdependent and interacting
parts.
The only real improvement is that which
enables the entire organization to serve
customer requirements better.
Systemic problems can only be solved
through cross-functional teamwork.
TQM Briefing by Enrico C. Mina

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Non-blaming/Non-judgmental
Behavior
A blaming culture causes people to hide
problems.
Problems are really opportunities for
improvement in disguise.
Focus on the problem and make people
problem-solvers.
The first time you get angry is the last time
you get the truth. (Ishikawa)
TQM Briefing by Enrico C. Mina

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Seven Basic Concepts (1)

SDCA to PDCA
The next process is the customer.
Quality first
Market in
Upstream management
Speak with data
Variability control and recurrence prevention
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SDCA to PDCA
Standardization and Improvement
A

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The Next Process Is the


Customer.
The Customer-Supplier Chain
Your
Supplier

inputs

Three Rules:
Do not
accept
defects.

Your
Process

outputs Your
Customer

Do not
make
defects.
TQM Briefing by Enrico C. Mina

Do not
pass on
defects.
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Quality First
The quality of the process must receive first
priority, ahead of Cost or Delivery.
A high quality process produces high
quality products at least cost and with the
shortest cycle time (enabling on-time
delivery).

TQM Briefing by Enrico C. Mina

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Market-in
A philosophy that seeks to find out factually
what customers want, and then designs the
product or service, and the processes that
create and deliver them, to suit customer
requirements.
Product-out: We know better than the
customers; we tell them what to do. We do
what is convenient for us, not for them.
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Upstream Management
Manufacturing
Product
Concept

Full-scale
Production

Design &
Develpmt.

Distribution

Process
Engg.

Sales

TQM Briefing by Enrico C. Mina

Prototype

After-sales
Service

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Upstream Management
Service
Service
Concept

Service
Strateg
y

Trial
Run

Full-scale
Operation
s

Service
Systems

TQM Briefing by Enrico C. Mina

Service
Staff

Follow-up
Service
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Speak with Data


Data mean facts.
Identify problems with data, analyze causes
with data, evaluate solution alternatives
with data, verify success with data.
Gut-feel and past experience are useful but
not enough. They must be validated with
data.
TQM Briefing by Enrico C. Mina

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Variability Control and


Recurrence Prevention
Problems are caused by failures occurring
in man, machines, materials, methods,
measurements, or environment.
It is necessary to identify the root causes of
a problem and to adopt countermeasures
that eliminate them, to prevent recurrence.
Ask Why? 5 times to trace root causes.
TQM Briefing by Enrico C. Mina

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Exercise in Self-Diagnosis
Principle or Concept: ____________
Inconsistent Consequent
Future
Ideas for
Practices
Problems Implications Improvement
1.
2.
3.
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10 Basic Rules for Practicing


Kaizen (1)
Discard conventional fixed idea for
operations.
Think of how to do it, and not why it cannot
be done.
Do not make excuses. Start by questioning
current practices.

TQM Briefing by Enrico C. Mina

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10 Basic Rules for Practicing


Kaizen (2)
Do not seek perfection. Do it right away
even if for only 50% of target.
Correct mistakes at once.
Do not spend money for KAIZEN.
Wisdom is brought out when faced with
hardship.

TQM Briefing by Enrico C. Mina

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10 Basic Rules for Practicing


Kaizen (3)
Ask Why? five times and seek root
causes.
Seek the wisdom of ten people rather than
the knowledge of one.
KAIZEN ideas are infinite.

TQM Briefing by Enrico C. Mina

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Hoshin Kanri (Policy


Deployment or Management by
Policy)
Mean
s

CEO
Sr/Mid
Mgrs
Suprvsr
s
R&F

Mean
s
Mean
s
Mean
s

Result
s

Result
s

Result
s

Result
s

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Service Quality (1)


Service means the provision of intangible
products, or work done for someone else.
It is also the work performed to help
internal customers achieve their objectives.
Where products are similar or equivalent,
service is the competitive edge.

TQM Briefing by Enrico C. Mina

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Service Quality (2)


Characteristics of service operations:
The product, or the greater part of the product
package, is intangible.
Measurement is more difficult.
Production and consumption are simultaneous;
there is little chance of pre-delivery inspection.
There are frequent person-to-person contacts
(moments of truth) between customers and
front-line personnel.
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The Service Triangle


Service
Strateg
y

CUSTOME
R
Service
System

Service
Staf

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Service Gaps (1)


Gap 1 - The inability to discern correctly
what customers really need and expect
Gap 2 - The inability to translate knowledge
of the customers needs and wants into
service process standards
Gap 3 - The inability of operating forces to
comply consistently with service process
standards
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Service Gaps (2)


Gap 4 - The inability to communicate
effectively with customers what the supplier
is doing to meet expectations; also, the
raising of these expectations through a
propensity to overpromise.
Gap 5 - The inability to effectively and
efficiently satisfy customer needs and wants,
as judged by the customer.
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Service Quality Dimensions (1)


RELIABILITY - Consistent ability to
satisfy the customers needs and wants
RESPONSIVENESS - Fast action on
customer orders, requests, inquiries, or
complaints
ASSURANCE - The ability to demonstrate
competence and to give the customer peace
of mind before the transaction takes place
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Service Quality Dimensions (2)


EMPATHY - The ability to place oneself in
the customers shoes and treat him/her as
one wishes to be treated
TANGIBLES - The physical appearance of
the service suppliers staff, facilities,
equipment, forms, vehicles, and other
resources.
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Benchmarking (1)
Benchmarking is the search for and
adoption of ideas for improvement and best
practices from other organizations.
It provides an identification of opportunities
for improvement even if current processes
are good enough.
It avoids reinventing the wheel.
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Benchmarking (2)
Three levels of benchmarking:
Internal the best practices of a particular
branch, plant, or facility of the same
organization become models for the others to
follow (e.g., best practices of a particular plant
are communicated to the others to have them
adopt these also)

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Benchmarking (3)
Competitive the best practices of another
organization engaged in the same business are
identified, analyzed, and copied (e.g., the best
practices of other manufacturers of similar
products around the world can be identified and
adopted).
Do reverse engineering.
Ask common customers what the competitors
practices are.
TQM Briefing by Enrico C. Mina

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Benchmarking (4)
Functional the practices of another
organization, not necessarily from the same
business, that have been identified as best in
class are analyzed and copied or adapted into
ones own organizational processes.

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CULTURAL CHANGE (1)


HANDICAPS

Size (number of personnel)


Age of the enterprise
Past success
Weak pressures from the market

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CULTURAL CHANGE (2)


TWO ROUTES TO THE QUALITY
JOURNEY:
CLSQ (Crisis Leadership makes you Sweat for
Quality)
VLSQ (Visionary Leadership makes you Sweat
for Quality)

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SUCCESSFUL TQM
IMPLEMENTATION (1)
ELEVEN PRE-CONDITIONS:
Management involvement and leadership
Organization for Quality
Communication
Participative management
Training and education
Measurements and standards
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SUCCESSFUL TQM
IMPLEMENTATION (2)

Plans, programs, and strategies


Regular reviews
Rewards and recognition
Supplier quality
Process management

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START-UP DILEMMA

O
U
T
P
U
T

quit
point?

results
curve
cost/efort
curve
TIME
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End

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